Daiichi Sankyo, Other Big Pharmas, Going Generic

The generic drug business is growing twice as fast as branded medicines so it is no wonder that J&J (JNJ), Novartis (NVS) (with the purchase of Hexal and Eon to form Sandoz) and now Daiichi Sankyo are interested.

Daiichi Sankyo announced Wednesday that they will buy a controlling interest (50.1%) in India’s Ranbaxy Laboratories for ~$4.6B, a 31% premium over Ranbaxy’s closing price yesterday. Daiichi’s CEO, Takashi Shoda, explains:

“The proposed transaction is in line with our goal to be a global pharma innovator and provides the opportunity to complement our strong presence in innovation with a new, strong presence in the fast growing business of non-proprietary pharmaceuticals”

Japanese drug makers like Takeda, Astellas and Eisai, have been throwing around some serious cash this year on M&A, licensing and the like for branded or developmental products. Interesting move from Daiichi to eschew conventional competitive means (beefing up the pipeline) and sticking to a growth business.